Glossary of energy-sector terms and phrases

WattClarity® began in 2007.

Since that time there have been hundreds of articles posted, and increasingly we’ve found ourselves posting articles specifically focused on assisting with different aspects of  energy literacy (at least in part because of the challenges this represents in our energy transition).  In the table below, we’ve started collating some of these explanations, for easier future reference:

‘Anytime/Anywhere’ Energy A term coined in the Generator Report Card 2018, in conjunction with another, to illustrate the growing polarisation of focus within the National Electricity Market and grid.

This page explains further.

ASEFS When time permits, we will flesh out this focused page here to explain the Australian Solar Energy Forecasting System (ASEFS).
(Generators) Avoiding Negative Prices Based on increased interest from a range of generators (both Scheduled/Semi-Scheduled and also Non-Scheduled) in avoiding periods where trading prices are negative, we’ve put this focused page together.
AWEFS When time permits, we will flesh out this focused page here to explain the Australian Wind Energy Forecasting System (AWEFS).
Bidding and Dispatch Process This page provides an explanation, and links to other resources progressively developed on WattClarity over the years.
Conformance Status Sometimes the terminology ‘Compliance Status’ is used interchangeably.  We like to think about it in the following terms:
1)  AEMO determines ‘Conformance Status’ as part of their process of balancing supply and demand; whereas
2)  AER focuses on ‘Compliance Status’ in terms of whether generators specifically follow Market Rules.
Connection Point Dispatch (CPD) Price Here’s a page explaining the Connection Point Dispatch (CPD) Price used in ez2view, and in the Generator Statistical Digest 2019
Credible Contingency What AEMO means by “Credible Contingency” – and, by extension, a “Non-Credible Contingency” was explained here by Allan O’Neil in the context of the bushfires of summer 2019-20.
Cumulative Price The Cumulative Price, and the Cumulative Price Threshold (and what this means for Administered Pricing) are all explained here.
Demand This page provides an index to explanations on WattClarity.
Demand Response “Demand Response” is a term used to a range of activities undertaken by electricity users to temporarily curtail consumption (or effectively lower net consumption from the grid through use of onsite generation) in response to some form of commercial incentive.

Given our keen interest in assisting with demand response at large energy users we established this focused site to help readers understand more about the different ways in which it might work.

Dispatch Error The ‘Dispatch Error’ is a formal calculation of the magnitude of deviation for a unit away from its Dispatch Target in a dispatch interval:

Dispatch Error = Dispatch Target – Final MW

‘Dispatch Error’ can be aggregated for groups of units – which AEMO does in an ‘Aggregate Dispatch Error’ (ADE).

We use ‘Dispatch Error’ as an input into calculating ‘Raw Off-Target‘ and hence to deriving ‘Conformance Status‘.

Dispatch Target At the beginning of each dispatch interval, each Scheduled and Semi-Scheduled unit* will receive a Dispatch Target, indicating where the AEMO expects the unit to be at the end of the Dispatch Interval.  The implications of this Dispatch Target are different for Semi-Scheduled units than they are for Scheduled units.

  Non-Scheduled units do not receive Dispatch Targets.

Because of the logistics of the process, this means that a units Dispatch Target will typically be received in the Participant’s MMS about 20 seconds into the Dispatch Interval.

DRM

(Dispatchable Reserve Plant Margin)

In the creation of our Generator Report Card (released 31st May 2019) we included analysis of a Dispatchable Reserve Margin, which was modelled on the IRPM that had been in use for many years,
DUID
(or unit)
AEMO terminology for Dispatchable Unit Identifier, the atomic level at which the NEM is dispatched.

Historically a DUID mapped most often to a discrete physical unit, but this was not always the case.  With the the introduction of Semi-Scheduled Wind and Solar plant, the whole station will typically be registered as a single DUID.

FCAS On this Glossary page here, we’re progressively fleshing out an explanation of various aspects of FCAS as it currently operates in the NEM.
FCAS Cost Recovery FCAS costs are recovered from the market in different ways:

Method 1)  Because it’s loss of supply that is the most likely cause of the need for Raise Contingency services, the costs of enabling FCAS Contingency Raise Services are recovered from all generators.

Method 2)  Because it’s loss of supply that is the most likely cause of the need for Raise Contingency services, the costs of enabling FCAS Contingency Raise Services are recovered from all loads (i.e. which are wholesale Market Customers (mostly retailers and some spot-exposed large energy users) and Scheduled Loads)

Method 3)  In contrast, the costs of FCAS Regulation services are recovered from all wholesale participants using a complex ‘Causer Pays’ methodology.

The Generator Statistical Digest 2019 went some way to establishing some transparency in this respect by calculating these costs for all DUIDs for each month through calendar 2019.

FCAS Revenues Describe later.
Fast Start Here’s a page explaining the Fast Start Inflexibility Parameters (FSIP) which NEMDE takes account of in dispatch
Forecasts We’re progressively fleshing out a page here to explain the various different types of forecasts provided by the AEMO under the NEM Rules.
Inertia Aspects about Inertia are explained here.
(Market) Intervention Aspects about Market Intervention are explained here.
IRPM

(Instantaneous Reserve Plant Margin)

The Instantaneous Reserve Plant Margin is explained here.
‘Keeping the Lights on’ Services A term coined in the Generator Report Card 2018, in conjunction with another, to illustrate the growing polarisation of focus within the National Electricity Market and grid.

This page explains further.

LGC (Large-Scale Generation Certificate) These are described on this page.
Low Reserve Condition The AEMO uses a three-level warning system alerting the market to actual, or forecast, periods of Low Reserve Condition – LOR1, LOR2 and LOR3.

This is described further here.

LWA (Load-Weighted Average) Price This is a metric we developed specifically for the GSD2019.

It’s synonymous with VWA Price … and not the same as VWA Revenue.

LWA (Load-Weighted Average) Revenue This is a more traditional metric.

Synonymous with VWA Revenue … and not the same as VWA Price.

Low Reserve Condition The AEMO uses a three-level warning system alerting the market to actual, or forecast, periods of Low Reserve Condition – LOR1, LOR2 and LOR3.

This is described further here.

Market Intervention Aspects about Market Intervention are explained here.
Market Price Cap The Market Price Cap sets the maximum level the dispatch price can reach through the dispatch process. It has been adjusted over time.
Market Price Floor The Market Price Floor sets the lowest level the dispatch price can reach through the dispatch process.
‘Negative LGC’ This has become a short-hand way of referring to a particular type of bid by Semi-Scheduled units as described here in the Glossary.
Non-Scheduled Category An explanation of how the Non-Scheduled category works is provided here in this Glossary.
Off-Target In the creation of our Generator Report Card (released 31st May 2019) we included analysis of a the extent to which individual generators might be Off-Target.

The way this is calculated is discussed here.

Price Energy Harvest Here’s a page explaining the concept of ‘Price Energy Harvest’ used in ez2view
Price Setter The price setting process is quite complicated – on WattClarity there are several articles published to help explain.  These are all linked together here.

In Part 3 of our Generator Report Card (released 31st May 2019) we a view of how often a particular DUID has been heavily involved in setting the price in a given region.

(Bidding and) Rebidding This Glossary section includes this page about the Rebidding Process, and AER Rebidding Guidelines – including what it means to be (in our view) “Not Well Formed”.
Reliability How ‘Reliability’ is formally defined in the NEM – and how it is often confused – is explored on this page here.
Scheduled Category An explanation of how the Scheduled category works is provided here in this Glossary.
Security of Supply How ‘Security of Supply’ is formally defined in the NEM – and how it is often confused – is explored on this page here.
Semi-Scheduled Category An explanation of how the Semi-Scheduled category works is provided here in this Glossary.
Solar Correlation Penalty This was a term we coined to follow on from the ‘wind correlation penalty term we’d coined some years earlier on WattClarity.

The ‘solar correlation penalty‘ term is described here in the WattClarity Glossary.

VWA (Volume-Weighted Average) Price This is a metric that’s not as widely used as the VWA Revenue – but has some particularly useful applications when seeking to compare price capture at different units without masking the results by the separate dynamic of transmission losses.   It was used in the GSD2019 for this purpose.

The VWA Price is described here.  It’s synonymous with LWA Price.

VWA (Load-Weighted Average) Revenue This metric is a more traditional metric useful for considering the various components of revenue (e.g. Price Capture (incl Constraints & Response to Negative Price), and Losses) at different units.  The VWA Revenue is described here.

It’s synonymous with LWA Revenue.

Wind Correlation Penalty This was a term we coined some years ago on WattClarity to describe the way in which a lack of diversity in wind harvest patterns in subjecting all wind farms in a location to declining VWA Revenues for each incremental wind farm added to a location.

The ‘wind correlation penalty‘ is further described here.

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